FASB extends ‘step zero’ assessment for goodwill impairment to all other indefinite-lived assets

BVWireIssue #119-1
August 1, 2012

Last week the Financial Accounting Standards Board (FASB) released the long-awaited Accounting Standards Update No. 2012-02, Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment.

During several months of outreach prior to issuing the final ASU 2012-02, many stakeholders expressed concerns “about the recurring cost of performing impairment tests for indefinite-lived intangible assets other than goodwill,” says the board’s most recent newsletter, the FASB In Focus. Stakeholders also wanted the board to extend the qualitative “step zero” testing for goodwill impairment, as codified in last September’s ASU 2011-08, to indefinite-lived assets. “The amendments do not change how an organization measures an impairment loss,” adds In Focus. “Therefore, it is not expected to affect the information reported to users of financial statements.”  

The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after Sept. 15, 2012. Early adoption is permitted; for more information, listen to the FASB podcast.

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